Stocks soared broadly across the board to finish near session highs Wednesday, propelling the Dow and S&P 500 to new record levels, boosted by strong gains in techs.
With the day's robust rally, all three major averages logged their best three-day rally of 2013 and are now in the black for the month.
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The Dow Jones Industrial Average rallied 128.78 points, or 0.88 percent, to finish at 14,802.24, propelled by Merck and Pfizer.
The S&P 500 jumped 19.12 points, or 1.22 percent, to close at 1,587.73, breaking above its previous all-time high of 1,576.09 set in October 2007. The Nasdaq surged 59.40 points, or 1.83 percent, to end at 3,297.25, finishing at a 12-year high.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, dipped below 13.
All key S&P sectors finished firmly in positive territory, led by health care and techs.
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"I'm frustrated more than excited," said Art Cashin, director of floor operations at UBS Financial Services. "We've made a new record high and at some point, you'd think that the market is going to break out—[instead,] it's been in a consolidation pattern and it's been moving higher in baby steps."
Cashin also noted that other indexes such as the Russell 2000 have not been following the uptrend.
"In all of the upward moves and record highs, there's a sense of seeking protection and safety," he said. "And if you look at the other markets around the globe, they're not participating in the same manner…it's encouraging that the Dow and S&P 500 are the two drivers, but you'd like to see it broaden out a bit."
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Earlier, minutes from the most recent Fed meeting suggested that a few policymakers expected to slow the pace of asset purchases by midyear and end them later this year, while several others expected to taper the rate a bit later and halt the program by year-end.
The Fed released the minutes of its latest meeting several hours earlier than planned after they were inadvertently released to about 100 Congressional staffers and trade lobbyists on Tuesday afternoon.
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In addition, policymakers were worried about increased risks due to the central bank's aggressive monetary stimulus, though most saw those dangers as "manageable" for now.
"In light of our forecast for a downshift in the trend rate of job growth in the second and third quarters, consistent with the recent March payrolls report, we remain comfortable with our call for purchases to be tapered at year-end and purchases to continue at a reduced rate into the third quarter of 2014," according to a note from Goldman Sachs.
Among earnings, CarMax rose after the used cars retailer posted a 13 percent gain in earnings, but comparable sales grew at a slower pace than the previous quarter.
After the closing bell, Bed Bath & Beyond is slated to report earnings, while Chevron is expected to post its interim results. Banking giants JPMorgan and Wells Fargo are scheduled to report on Friday.
S&P 500 earnings are expected to rise just 1.6 percent year-on-year in the first quarter, compared to 6.2 percent in the last quarter, according to Reuters. Negative warnings have been higher than usual in the first quarter, with 108 downward revisions for companies, compared to 23 positive revisions, the worst ratio for 12 years, said Reuters.
President Barack Obama said his budget proposal offers a fiscally responsible path to deficit reduction and job creation and called for Republican lawmakers to compromise with him, adding his plan would raise revenue by eliminating some tax loopholes enjoyed mostly by the wealthy.
The Treasury auctioned $21 billion in 10-year notes at a high yield of 1.795 percent. The bid-to-cover ratio, an indicator of demand, was 2.79.
Chinese imports surged more than 14 percent from a year ago, a sign that demand from the world's second-largest economy remained strong.
In Europe, S&P revised its outlook on Cyprus to "stable" from "negative," saying immediate risk of sovereign default in the nation has receded.
And U.S. Treasury Secretary Jack Lew wrapped up his visit to Europe, calling on his European counterparts to strike a balance between growth and austerity and to boost demand.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
THURSDAY: Fed's Plosser speaks, Fed's Bullard speaks, Jobless claims, import/export prices, natural gas inventories, 30-yr bond auction, Fed balance sheet, money supply, Deutsche Bank annual mtg; Earnings from Pier 1 Imports, Rite Aid, JB Hunt
FRIDAY: PPI, retail sales, consumer sentiment, business inventories, Bernanke speaks at Fed's development conf.; Earnings from JPMorgan, Wells Fargo
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